What exactly are ‘common time frames’ for NDCs? While there is little doubt that the communality in question refers to NDCs and thus to Parties of the Paris Agreement, it is not self-evident what exactly the term ‘time frame’ refers to. So, it may be most fruitful to begin by looking at the options for (common) time frames, in order to be able to proceed with evaluating their usefulness in a meaningful manner.

A proposal to establish a similarly structured trans-national Western Climate Fund to receive contributions for the multilateral funds of the Paris Agreement, in particular the LDCF, from States and Provinces in or around the Western Climate Initiative (WCI).

LDC Chair Gebru Jember Endalew writes: "Dear Governor Brown, As Chair of the UNFCCC Group of Least Developed Countries (LDCs), I would like to bring to your attention a proposal for a Fund to collect contributions for multilateral climate finance, in particular for the United Nations LDC Fund, from States and Provinces in or around the Western Climate Initiative... ."

A wave of anti-Trump, pro-climate enthusiasm has washed across the US since president Donald Trump decided to abandon the Paris climate agreement.

Affirmations of the Paris goals have come from thousands of centres of power. State capitols, mayors’ offices and boardrooms have aligned to tell Trump “We Are Still In”. Twelve states, plus Puerto Rico, representing a third of US citizens, have joined the United States Climate Alliance, which commits to meet the carbon cuts the US pledged to the Paris accord.

But those standing by the agreement had, until this week, universally ignored the part of the deal that binds it all together – cash.

Submission on the Review of the Functions of the Standing Committee on Finance

We propose that the SCF, in its resource mobilization function, develop a Work Plan on Alternative and Innovative Sources of Finance (similar to the existing Work Plan on MRV of Support) – possibly implemented through the Long-Term Finance Work Programme under the aegis of the SCF – with the aim to produce regular (biennial) reports to the COP and the CMA to feed, inter alia, into the biennial ministerial roundtable on climate finance

An Act enabling taxpayer donations to the Least Developed Countries Fund, an initiative of the U.N. Framework Convention on Climate Change as filed by Massachusetts State Senator Michael J. Barrett, 28 March 2017

The surprise election of avowed climate sceptic Donald J. Trump as the 45th US President not surprisingly led some commentators to highlight parallels with the situation in 2001, when President George W. Bush repudiated the Kyoto Protocol

This Strategy Note looks at the situation in 2001 – when the EU took the initiative to save the Kyoto Protocol – and now, with a view to assessing the need for, and chances of, invigorated EU leadership in the international effort to combat climate change under the 2015 Paris Agreement.

Given the statements made by the Chinese leadership in the aftermath of the recent US elections, it is clear that China is willing to continue playing a leading role, both in its domestic actions and in the international climate negotiations. But, the authors argue, the loss of the developed country partner in the ‘G2’ has put China as a developing country in a difficult position because of the internationally acknowledged requirement for leadership from the developed world.. In order to get the maximum ambition out of the Paris Agreement, there needs to be a suitable developed country partner to take up the role of the US in the G2.

This, the authors argue, is where the EU can and must enter into the picture: to help provide the geopolitically balanced leadership which the Paris Agreement requires, if not to survive, then in order to be ambitious and effective. They propose two related measures that would be conducive to that end.

For the new G2 partnership to be as ambitious and effective as possible, the authors suggest that it should be based on ‘strategic collaborations’, by which they mean collaborative actions that involve some concrete quantified targets to be achieved under the collaboration, be it in terms of reducing (utility) emissions or through the linking of emissions trading schemes.

In light of the complexity of competencies in the EU, they also suggest that for collaborations in areas with mixed or sole Member State competence, the presence of a high-level EU ‘Special Envoy for Strategic Climate Change Collaboration’ could be helpful – not only in matters of internal coordination, but as designated interlocutor managing the external relations of the collaborations.

Strategic collaborations thus facilitated should help the EU to demonstrate renewed leadership, in particular (but not only) to partner with China in an ambitious and effective new G2.

It should also be recognized that strategic relationships with other countries, including G 77, should also be an element in the EU effort.

This Brochure gives an overview of a project started by Oxford Climate Policy in May 2016, to design and, funding permitting, operationalise the ‘Oxford Crowdfunding for Adaptation’ (OCAD) initiative for corporate air-travel related donations to the Adaptation Fund.

The idea of levying a small charge on air travel to support adaptation efforts in developing countries has been around for over a decade, but it failed to take off as an international instrument. In December 2012, the Adaptation Fund (AF) introduced a ‘Donate’ link on its website, implemented in partnership with the UN Foundation, to receive crowdfunding donations. Following some preliminary research , the OCAD initiative was targeted at corporate air travel, in particular on companies that have, or may be willing to include, climate change as part of their Corporate Social Responsibility (CSR) portfolio, such as companies that offset the emissions caused by their corporate travel.

The initiative is to encourage these target corporates to donate 1 percent of their air travel costs to the Adaptation Fund directly through its existing individual donation facility. It is estimated that a participation of 1 percent of global corporate air travel would yield USD 100 million annually.

The recent elections have had a sobering effect on expectations regarding US federal actions on climate change, although true to form, President-elect Trump seems to be changing positions on the hoof as he trots along.

This blog looks at the likely negative impact of the US elections on American climate finance for developing countries, and looks at how they could be mitigated at least to some degree through sub-national innovative finance.

Submission to the GCF Board with regards to the Strategy on Accreditation

This submission is in response to the 18 April invitation by the Green Climate Fund (GCF) Secretariat for submission of inputs on the strategy on accreditation in relation to the questions in the report of the Accreditation Committee on the progress on developing a strategy on accreditation.

After examining the current state of affairs, this submission concludes that:
(i) in the longer term, the best limitation strategy is to set a cap on numbers of accredited entities, and
(ii) in the short-term, the most effective way to mitigate the existing imbalances (as well as to incentivise the “signature” Enhanced Direct Access modality) is to grant top priority accreditation to nation-wide entities submitting an EDA pilot proposal.

This submission is in response to the request in the Progress Report on the review of the Initial Proposal Approval Process (IPAP) for clear guidance on … what qualifies as a programme (minimum requirements for a programmatic proposal). It suggests that ‘programmes’ should be defined in terms of devolved decision making and the IPAP should be urgently adapted to accommodate such devolved programmes as envisaged in the Terms of Reference for the Enhanced Direct Access Pilot Phase which state that ‘unlike the traditional direct access modality, there will be no submission of individual projects or programmes to the Fund because decision‐making for the funding of specific pilot activities will be devolved to the country level’[Annex I of Decision B.10/04]

This brief history of Enhanced Direct Access traces the idea back to a number of historic precursors, such as the Kreditanstalt für Wiederaufbau (KfW under the Marshall Plan, the World Bank Kecamatan Development Program in Indonesia, and the Brazilian Amazon Fund. It then follows how the idea evolved under the Bali Action Plan, the Transitional committee for the design of the Green Climate Fund (GCF) and finally, the GCF Board, culminating in the establishment of a GCF EDA Pilot Phase.

The recent OCP/ecbi Concept Note "A Paris Replenishment Cycle for Contributions to the UNFCCC Financial Mechanism" introduces the idea of a joint replenishment of all the funds that are to serve the Financial Mechanism of the new Paris Agreement. This follow-on Discussion Note is meant to provide some input into the discussion of how such a joint replenishment might work.

An informal roundtable consultation with senior government officials on Consolidation and Devolution of Climate Finance in India took place at the India International Centre, New Delhi, India, on 7 August 2015. The consultation was organised by Oxford Climate Policy and the Indian Keystone Foundation, sponsored by BothEnds and ecbi, and co-facilitated by Rita Sharma, former Secretary to the Government of India, Ministry of Rural Development, and Prodipto Ghosh, former Secretary to the Government of India, Ministry of Environment, Forests and Climate Change.

Among the 23 participants were representatives from the Ministries of Agriculture; of Environment, Forests and Climate Change; of Finance; of Health and Family Welfare; of Rural Development; and of Water Resources. The Deputy Managing Director of the National Bank for Agriculture and Rural Development (NABARD), and the Chief General Manager of the Small Industries Development Bank (SIDBI), two of the designated national implementing entities for the Green Climate Fund (GCF), and the Indian member of the GCF Private Sector Advisory Group, also participated.

The purpose of the meeting was:
i. to discuss national arrangements for climate finance, both at the national and the sub-national level with a particular focus on access by local stakeholders, such as vulnerable communities and Micro, Small and Medium Enterprises (MSMEs);
ii. to discuss developments at the Green Climate Fund (GCF), in particular with regard to Enhanced Direct Access; and
iii. to reach out to government actors who have not been significantly engaged in the climate finance discussions so far, but could play an important role.

Pratim Roy, Director, Keystone Foundation, welcomed participants to the meeting, and following a tour de table, handed over to Rita Sharma, former Secretary, Ministry of Rural Development, who chaired the first session on existing arrangements for climate finance in India.

The discussion was kicked off with a presentation by Anju Sharma, Head of the ecbi Publications and Policy Analysis Unit, summarizing her recent study on Consolidation and Devolution of National Climate Finance: The case of India.

Sharma noted that existing arrangements for climate finance in India were dispersed and fragmentary, and invited participants to consider:
• how existing climate finance sources could work together, to achieve clear and common goals and targets; and
• how they could be made to target better the needs of the poor, and be locally owned and driven.

She pointed to the need for a level of “consolidation without centralization,” accompanied by a strong agenda for “devolution,” while proposing that existing arrangements, for instance for the National Rural Employment Guarantee Scheme that also targets the poor and vulnerable, could also be deployed for climate finance.

There was convergence that some form of consolidation and strategic guidance of climate finance flow at the national level, for instance through a national steering committee, would be helpful. Minimally, such a committee should be tasked with monitoring domestic climate finance flows, analysing their effectiveness, and providing recommendations of how shortcomings could be remedied. It was also mentioned that the effectiveness of such a committee could be increased if it had some resources, say in the form of a National Climate Fund, which would allow it to carry out some of these remedial actions itself.

At the same time, there was general agreement that in order to provide funding for local stakeholders (public or private), there is a need for in-country devolution of decision-making in general, and of project approval, in particular. In other words, it was recognised that local projects need local approvals/intermediation.

The second half of the proceedings focussed on the GCF, and the idea of Enhanced Direct Access (EDA). Ousseynou Nakolima, Director of Country Programming at the GCF, joined the discussion virtually from the GCF headquarters in Songdo, South Korea. After a brief message by Nakoulima on why EDA is of paramount importance for the GCF, Ghosh, who was chairing the session, asked Benito Müller, Director ecbi, to give an introductory presentation.

Müller’s presentation began with a brief history of the idea of EDA, in particular in the context of the GCF. He then presented the latest developments, namely the Terms of Reference (TOR) for an EDA Pilot Phase that had been approved at the most recent GCF Board meeting in Songdo (July 2015). The presentation concluded with summary of an Indian case study of how to engage MSMEs through local intermediation.

In the course of the ensuing discussion, particularly on the EDA TOR, Nakoulima was able to answer directly a number of questions by participants, who also raised a number of issues that may need to be taken into account in the formulation of a call for proposals for the EDA Pilot Phase, such as the issue of how to handle multiple implementing entities applying for a pilot programme, in particular with respect to the national oversight and steering function required in the TOR.

After a round of final statements, Roy closed the meeting by thanking the participants, both physical and virtual, and in particular the two co-facilitators who were key to the success of the meeting, both during and in the run up to it.

At the tenth meeting of the GCF Board (July 2015), the Accreditation Committee was requested to work on a strategy on accreditation, “examining efficiency, fairness and transparency of the accreditation process, and the extent to which current and future accredited entities will enable the Fund to fulfil its mandate.” This blog argues that for reasons of efficiency and fairness, the strategy will need to pursue two strategic objectives, namely:

- achieving a fair balance between international and direct access entities, and
- ensuring that the GFC is not suffocated by overwhelming numbers of accredited entities.

After examining the current state of affairs, the blog proposes that in the short-term, the most effective way to mitigate the existing imbalances (as well as to incentivise the “signature” Enhanced Direct Access modality) would be to grant top priority accreditation to nation-wide entities submitting an EDA pilot proposal.

Decision B.11/03 invites observer organizations to make submissions to the GCF Secretariat on the elements contained in paragraph (c) by 1 December 2015. This submission is in response to the element of this paragraph stipulating that the measures to be considered in the GCF Strategic Plan should inter alia focus on ‘ensuring that the GCF is responsive to developing country needs and priorities, while ensuring country ownership, [and] enhancing direct access […]’. With respect to this element, we believe certain ‘architectural’ considerations are absolutely key, in particular the issue of what is to be administered ‘in-house’ and what is to be left to others, or ‘outsourced’.

It is imperative that the recently launched GCF strategic planning process focus not only on strategic objectives and the like, but also on institutional and governance architecture, and in particular on enhancing complementarity, effectiveness, and efficiency through a division of labour between the GCF as wholesale agent, and other funding entities as specialized retailers, be it in-country (preferably) through Enhanced Direct Access, or through designated international funds, in particular those that will be serving the financial mechanism of the new Paris Agreement.

Developed country climate finance is generally regarded as quid pro quo for developing country mitigation action, and vice versa. In the Copenhagen Accord, for example, developed countries commit themselves to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries … in the context of meaningful mitigation actions and transparency on implementation. The latter was provided through developing country ‘Copenhagen pledges’ (Nationally appropriate mitigation actions of developing country Parties).
What could be the equivalent finance quid in Paris for the developing country Intended Nationally Determined mitigation Contributions (INDCs)?

If, following the example of the Copenhagen pledges, the INDCs currently submitted are meant to be one-off occurrences, then some new overall finance goal for 2025/30 might be sufficient. If, however, the (I)NDCs are meant to be part of an enduring contribution cycle then it stands to reason that the ‘finance quid’ needs to have a similar periodic structure. This Concept Note argues that the most pragmatic and effective option for such a periodic finance instrument would be the establishment of a Paris Replenishment Cycle for the UNFCCC Financial Mechanism. This, it is argued, would satisfy many of the long-standing developing country demands, in particular the key demand for more predictability.

Why national entities submitting an EDA pilot proposal should be prioritized in the GCF Accreditation Strategy

At the tenth meeting of the GCF Board (July 2015), the Accreditation Committee was requested to work on a strategy on accreditation, “examining efficiency, fairness and transparency of the accreditation process, and the extent to which current and future accredited entities will enable the Fund to fulfil its mandate.” This blog argues that for reasons of efficiency and fairness, the strategy will need to pursue two strategic objectives, namely:
1. achieving a fair balance between international and direct access entities, and
2. ensuring that the GFC is not suffocated by overwhelming numbers of accredited entities.

After examining the current state of affairs, the blog proposes that in the short-term, the most effective way to mitigate the existing imbalances (as well as to incentivise the “signature” Enhanced Direct Access modality) would be to grant top priority accreditation to nation-wide entities submitting an EDA pilot proposal.

The first, and possibly most momentous decision to be adopted on the final day of the tenth Green Climate Fund (GCF) Board meeting (Songdo, 9 July 2015) was the launch of a five year pilot phase on enhanced direct access (EDA Pilot). It was the crowning moment in the (sometimes arduous) three-year process that began with the inclusion of a mandate in the GCF Governing Instrument for the GCF Board to consider additional modalities that further enhance direct access, including through funding entities with a view to enhancing country ownership of projects and programmes.

The EDA Pilot will initially aim to provide up to US$ 200 million for at least ten pilots, including at least four pilots to be implemented in Small Island Developing States, the least developed countries and African States. It will include devolved decision-making to regional, national, and subnational entities and stronger local multi-stakeholder engagement. The decision-making on the specific projects and programmes to be funded will be made at the national or subnational level, and such direct access is a means to increase the level of country ownership over those projects and programmes.
It also requires a National Oversight and Steering Function for country pilots to be overseen and strategically guided at the national level, and envisages engaging local stakeholders through local intermediation. These key requirements on country pilots correspond precisely with the conclusions on what the EDA Pilot should focus on, drawn in the most recent OCP/ecbi publications on the matter:
- "Consolidation and devolution of national climate finance", and
- "Engaging Micro, Small, and Medium Enterprises in developing countries"
(both available on ecbi website)

Having been established more than a decade ago to address the urgent and immediate needs of the Least Developed Countries (LDCs) especially vulnerable to the impact of climate change, the Least Developed Countries Fund for Climate Change (LDCF) still struggles to obtain adequate and predictable funding. The Global Environment Facility, the operating entity of the LDCF, has been unable to program LDCF resources at the level of around US$200 million per year, as proposed in the Programming Strategy for the LDCF.

More generally, this Think Piece by Benito Müller argues, a success at the UN Climate change summit Paris in December will require a significant finance package which is not ad hoc, but rather provides genuine longer-term predictability. In addition to using the proceeds of new international market mechanisms, we think there is also a need to look at innovative sources at the national and sub-national level.

At present, the most promising candidate in this respect is the proposed EU Financial Transaction Tax, aimed to enter into force by the end of the year, with an estimated annual revenue of €37 billion, earmarked for development aid, fighting epidemics and climate change.

However, there are other, sub-national options that need to be explored, in particular where national options are politically unrealistic or insufficient. California could thus decide to use part of the revenue from auctioning allowances for its emission trading scheme. Over the last couple of years this revenue has been steadily increasing to a level (over $1bn in FY14-15) where it might well be politically feasible to use part of it to cover a significant share of the $200 million per annum considered to be the strategic resource requirement of the LDCF.

Should the Adaptation Fund seek accreditation with the Green Climate Fund?

What should be the role of the Adaptation Fund in the post-2015 climate finance regime? In particular, what should be its relation with the Green Climate Fund? This blog by Benito Müller argues that it makes sense for both the AF and the GCF to harness their complementarities by making the AF the main multilateral “retail outlet” of the GCF for concrete small and micro adaptation projects, particularly under the regular direct access modality, as pioneered by the AF. For this to happen, the AF Board must (i) become an accredited intermediary (‘funding entity’) of the GCF, and (ii) arrange a ‘complementarity MOU’ with the GCF.

A great deal of confusion has resulted from the fact that it has hitherto not been possible for the GCF Board to agree on definitions for some of the key nouns referred to in the GCF Governing Instrument in the context of who can access GCF funding. This Concept Note by Benito Müller proposes the following very simple definitions in terms of the GCF accreditation categories:

Consolidating national and international climate finance in a national fund in India could help ensure a common vision and principles; coherence with national strategies; distributive justice; prioritisation of the needs of the most vulnerable; balance between adaptation and mitigation; and continuous review, to enable course corrections when necessary. However, this consolidation must come with a strong commitment to devolution.

National and international finance is increasingly becoming available in developing countries to address climate change for both mitigation and adaptation. However, existing (domestic) arrangements for climate finance are often dispersed and fragmentary, and lack clear goals and strategies, therefore allowing for neither efficiency nor accountability.

This paper examines the governance arrangements for climate finance in India, and proposes the creation of an Indian National Climate Fund to pool climate finance from different national and international sources, to channel it to the State and local levels.

The Fund should seek to “consolidate without centralisation”, and to devolve decision-making on the use of climate finance to local governments. In addition to defining a common vision and principles for climate finance, such a National Funding Entity should aim for coherence with national development goals strategies, and integration across sectors; distributive justice, to ensure that climate finance reaches those who need it most, and that their needs are prioritised; and a balance between different thematic areas (such as mitigation, adaptation, capacity building etc.). It should also review progress continuously, and make mid-course corrections where necessary.

What is the future of adaptation financing under a new global climate agreement and beyond the UNFCCC? What role will an actor such as the Kyoto Protocol Adaptation Fund, which strengthened country ownership by pioneering direct access, play as a result of ongoing efforts to rationalize the global climate finance architecture with the full operationalization of the Green Climate Fund (GCF) as a new major player?

These are some of the questions that were put to the participants of a discussion meeting convened by the Heinrich Boell Foundation North America and the European Capacity Building Initiative (ecbi) on 7 December 2014 (during UN Climate Conference in Lima/Peru). The conversation was kicked off with a short presentation by Benito Mueller on the future of the Adaptation Fund (available at http://www.eurocapacity.org/public/chronicle.shtml).

This meeting report was produced jointly by the Heinrich Boell Foundation and Oxford Climate Policy, on behalf of ecbi.

On 5 March, the Green Climate Fund (GCF) Secretariat published a Board Paper and Draft Decision on ‘Additional Modalities that Further Enhance Direct Access: Terms of Reference for a Pilot Phase,’ putting forward recommendations to the GCF Board on how to operationalise the ‘Enhanced Direct Access Pilot Phase’, which was agreed during the last Board meeting that took place in Barbados in October 2014. The Draft Decision is ‘to launch a Request for Proposal to countries through their national designated authority or focal point and public media to competitively select subnational, national, public and private entities for the implementation of 5 pilots with a total of US$ 100 million, including at least 2 pilots to be implemented in small island developing States, the least developed countries and African States’.

Given that engaging local Micro, Small, and Medium Enterprises (MSMEs) at scale is critical to achieving sustainable low carbon growth in developing countries, this OCP/ecbi Working Paper puts forward a proposal for testing different nationally determined models of an in-country nationally consolidated and guided, but domestically devolved funding architecture for MSMEs under the Pilot Phase.

The key elements of this proposal are:
(i) to consolidate foreign and national public sector finance in a national gateway (‘National Funding Entity’), such as a national climate fund or, in the absence thereof, the Ministry of Finance to serve, inter alia, as GCF Intermediary;
(ii) to select a national body (e.g. the national climate committee) representing all key stakeholders – the relevant line ministries, the NDA, civil society, private sector etc. – to give strategic guidance to the national EDAPP programme.
(iii) to use existing channels (such as local branch networks of national development banks) to disperse the funding through local intermediation, where local intermediaries (branches) are given the power to approve eligible MSME projects under the national EDAPP programme.

In addition to discussing these key elements in some detail, the Working Paper illustrates how the GCF Private Sector Facility could use the EDAPP to fulfil one of its core mandate, viz. to ‘promote the participation of private sector actors in developing countries, in particular local actors, including small- and medium-sized enterprises and local financial intermediaries.’[GCF Governing Instrument, paragraph 43]

The Working Paper also presents two examples of how local banks are currently used as intermediaries for funding developing country MSME mitigation projects:

• The Sustainable Use of Natural Resources and Energy Financing framework, funded and managed by the French development agency AFD, under which local banks are used as intermediaries for the provision of concessional loans and (ex ante) investment grants to MSME renewable energy and energy efficiency projects (in industry, agriculture and buildings).

• The GEF funded Indian MSME Energy Efficiency Project, managed by the Indian Bureau of Energy Efficiency (BEE), and the Small Industries Development Bank of India (SIDBI). The project provides (ex post) performance linked grants through local SIDBI branches to incentivize energy efficiency improvements in (energy intensive) MSMEs.

These examples not only demonstrate in practical terms how a local intermediation can be done, but also that it very efficient and effective and most likely the only way to mobilise local MSMEs at the required scale.

On 17 December, an OCP blog on GCF Direct Access Accreditation: A Simple Strategy was published by Benito Müller. It proposes a very simple two-element accreditation strategy for direct access to the GCF:

[1] Introduce a time limit of five years on accreditations (for all entities), with the possibility of renewal, depending on re-nomination by the recipient country and GCF Board approval.

[2] Limit the number of entities that can access the GCF directly to one or two per recipient country.

In their Scenario Note on the sixth part of the second session of the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP), the ADP Co-chairs emphasized that “it is essential to use the October session to make significant progress in clarifying and advancing the content of the 2015 agreement, to build bridges and to work together on outstanding issues. In particular, it will be important in the October session, to further clarify and flesh out the operational aspects of the agreement. Key challenges that will need focussed attention in our work include: deepening the understanding on the longer-term cycle of contributions/commitments, including its periodicity (length) and the functions of the steps proposed, such as any periodical consideration or assessment and review”

This ecbi/OCP Concept Note introduces the idea of a Dynamic Contribution Cycle as a contribution to the debate on these issues.

International equity/distributive justice (a fair share for each recipient country) and global efficiency (biggest global bang for the buck) provided the bang in question is well defined for all the relevant activities are both legitimate resource allocation objectives that need to be addressed.

Generally, efficiency and equity cannot be achieved simultaneously through a single allocation which is why the proposed way forward is to deal with the two objectives in separate allocations, whereby each funding envelope is divided into two (not necessarily equal) sub-envelopes: one guided purely by efficiency, and the other purely by equity considerations. The exact nature of the allocation methods in the two sub-envelopes and their relative size will depend on the funding theme.

This Submission focuses on the allocation of adaptation resources in the context of taking account of recipient country needs. While it is possible to estimate adaptation funding needs of countries, it is not straightforward, if at all possible, to compare adaptation activities with respect to their cost-effectiveness: there is no globally comparable 'bang' in this context. This is why adaptation resources should be allocated principally in proportion to adaptation funding needs (in conjunction with the basic floor allocations)

A Legal Note which considers the legal options for creating such a space for Quantified Emission Limitation and Reduction Obligations (QELROs) in the Paris Agreement. In particular, it explores the legal feasibility of having an annex to a Treaty/Protocol where Parties could inscribe targets which would automatically become legally binding.

This Concept Note introduces the idea of a Southern Solidarity Fund, to be operated by the Green Climate Fund, which would allow solidarity contributions to climate finance by developing countries as part of South-South collaboration

The Board of the Green Climate Fund (GCF) is currently in the process of designing “access modalities” as part of the fundamental Fund architecture. Over the last few months, the focus of this exercise has slowly but significantly turned towards the idea of “Enhanced Direct Access” (EDA) through “Funding Entities” (FEs) ? as envisaged in paragraph 47 of the GCF Governing Instrument (GI). This idea is by no means new.2 Indeed there exists a considerable literature considerable on the topic, but it was only at the most recent GCF Board meeting in Nusa Dua, Indonesia, that the idea was given centre stage in a workshop on “Country Ownership and Enhancing Direct Access” organised by the Indonesian host of the meeting.
The aim of this Guide is to provide a rough idea of what this Enhanced Direct Access modality is meant to be and how it relates to some of the other, more traditional modalities and approaches such as the “Programmatic Approach”. As such it is meant to be complementary to the recent ecbi Policy Brief on “Devolved Access Modalities"

The Green Climate Fund (GCF) Board is in the process of considering additional modalities that further
enhance direct access, including through funding entities with a view to enhancing country ownership of projects and programmes.1 The term ‘enhancing’ in this context refers to a devolution by the Board of certain operational
funding decisions to outside agencies: ‘(accredited) funding entities’.2 This type of devolved/decentralized access modality has been proposed as an alternative to the more traditional model where detailed project approval is carried out at the multilateral level (e.g. by the Global Environment Facility Council/ Secretariat, or the Adaptation Fund Board). It has been argued that this sort of decentralized/ devolved model is key to the GCF being able to operate at scale,3 but it is also clear that it could give rise to a fundamental tension in the partnership between the GCF and these accredited funding entities, in that they each may well have different objectives, say with regards to national development and global climate change benefits.

This discussion note discusses some of the contentious issues around the Green Climate Fund negotiations and proposes that, in the case of mitigation funding, two separate funding envelopes/streams should be introduced: one dedicated to efficiency and the other to (intra-generational) equity. In the case of adaptation funding, resources should be allocated in proportion to country adaptation funding needs. For example, estimated in terms of the number of people exposed to climate change impacts and the intensity of these impacts (their “vulnerability”). This should be carried out separately with respect to the funding set aside for particularly vulnerable countries, and to the funding for the other countries.

In about a week’s time, the Green Climate Fund Board will meet in Bali to continue discussions on the design of what could be a radical new global fund. This will be a critical meeting – it will decide whether the GCF Board chooses to be radical in order to be effective, or simply opt for the easy, same old International Financial Institution (IFI) business-as-usual model of “doesn’t really work, but we’re afraid of transformational change”.

The Green Climate Fund (GCF) was launched in late 2013 and is set to play a key role in disbursing some of the $100 billion per year pledged to flow annually to developing countries by 2020 in support of climate action. A key question for the GCF Board concerns the rules for allocating its funds, as Benito Muller, Managing Director of Oxford Climate Policy, explains.

This OIES Energy and Environment Working Paper is the third and final study on resource allocation which Benito Müller has been engaged in over the past year – the previous papers being on the Allocation of (Adaptation) Resources: (September 2013) and on Quantity Performance Payment by Results: (July 2013). This Working Paper looks at the lessons to be learned, in particular for the Green Climate Fund, from the Performance-Based Allocation (PBA) system of the World Bank’s International Development Association (IDA), and the Resource Allocation Framework (RAF) as well as the System for Transparent Allocation of Resources (STAR) of the Global environment Facility (GEF).

The Green Climate Fund is at a crossroads where it must choose between the traditional centralized or a novel devolved decision making model. The next meeting of the GCF in February will be key as it will for the first time be explicitly discussing enhanced direct access through (national) funding entities which has devolution of decision making as its corner stone. This Discussion Note by Benito Müller takes stock of the deliberations on direct access and the correlated issue of country ownership, and considers how these issues should be taken forward at the February meeting.

Open letter by Benito Müller to the Green Climate Fund Board and supporters of enhanced/devolved access in the wake of the recent Paris Board meeting.

"Paradigm shifts" are very often referred to in GCF parlance, but mostly in the context of low-emission and climate-resilient pathways. However, if the GCF is to achieve its objectives, it is argued, then "same old, same old" finance paradigm will also not suffice.

This OIES Energy and Environment Brief looks at lessons from fiscal transfer mechanisms, i.e. instruments used to allocate central tax revenue to sub-national governments, for the allocation of (adaptation) resources by the Green Climate Fund.

Submission to the Standing Committee on Finance for its fifth meeting (SCF5). It focuses on Modalities 'by which a particular funding decision may be reconsidered in light of [the] policies, programme priorities and eligibility criteria established by the COP', as required by Article 11.3.b of the Convention. Exploring the debate around Modalities and puts forward a pragmatic proposal for compromise.

At the 16th Conference of the Parties (COP) in 2010, developed countries formalised a collective climate finance commitment made previously in Copenhagen of “mobilising jointly USD 100 billion per year by 2020 to address the needs of developing countries...from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources” (UNFCCC, 2010). However, there is currently no definition of which “climate” activities, flows, or other interventions could count towards the USD 100 billion; what “mobilising” means; or even which countries are covered by this commitment.
At present, official systems in place to track climate finance mainly focus on public outflows from developed countries. The greatest uncertainties relate to private and South-South flows to developing countries as well as domestic flows.

This paper focuses on the issue of private climate finance mobilised by developed countries in the context of the USD 100 billion commitment. It examines different definitions used by actors to quantify the level of private climate finance mobilised by their interventions, as well as the methods used to track private climate finance.

This OIES Research Paper by Benito Müller, Samuel Fankhauser, and Maya Forstater looks at the possibility of using Quantity Performance (QP) instruments for 'wholesale' mitigation funding through enhanced direct access to the Green Climate Fund (GCF)

The Paper carries out an evaluation of such instruments in this context with respect to three key objectives of the GCF, namely, to promote a paradigm shift towards low-emission and climate-resilient development pathways, to achieve economic efficiency in directly securing emission reductions at cost, and to support equity in the distribution of resources. Based on this evaluation, the paper concludes that QP instruments can be used in conformity with these objectives, provided they are used as a complement to other funding instruments.

It ends by putting forward two examples of how QP instruments could be used in such a 'wholesale' fashion

Submission to the UNFCCC Standing Committee on Finance (SCF) for its fourth meeting on 15-17 June in Bonn, Germany.

The focus of the recent SC meeting in Bonn was to draft the text for the arrangements between the UNFCCC Conference of Parties and the Green Climate Fund. This submission by the Oxford Institute for Energy Studies looks at the question that ultimately proved to be most controversial: What does it mean for an Operating Entity of the UNFCCC Financial Mechanism to be accountable to the COP, and how does this relate to operationalizing Art. 11.3 (b)?

Information Note on the Green Climate Fund Business Model Framework The Governing Instrument of the Green Climate Fund stipulates: The Board will consider additional modalities that further enhance direct access, including through funding entities with a view to enhancing country ownership of projects and programmes. Unfortunately, it does not elaborate further either on the concept of ‘enhanced direct access’ nor on the notion of a ‘funding entity’. The aim of this note is to fill this semantic lacuna, and give a brief overview of a concrete example of the latter.

At the second meeting of the Green Climate Fund (GCF) Board in October 2012, India announced they would prepare a submission with regards to the Board deliberations on a business model for the GCF. A consultation meeting was held in New Delhi on 15-16 February 2013 for which Benito Müller (Director Energy and Environment, OIES) was asked to contribute one of three background papers, focussing on access modalities and disbursement instruments. This Oxford Energy and Environment Brief is based on this background paper.